Audit (A-07-09-02759)

Executive Summary

Geographic classifications used by National Government Services, Inc. (NGS), to calculate the Medicare operating disproportionate share hospital (DSH) adjustment resulted in an overpayment at one hospital. Of the operating DSH adjustment of $2.4 million that Pioneers Memorial Hospital (Pioneers) claimed on its cost report for the fiscal year ending June 30, 2005, $334,000 was excessive because NGS calculated the operating DSH adjustment as if the hospital was urban for the entire cost report period. However, Pioneers was rural for the period July 1, 2004, through September 30, 2004. This resulted in an operating DSH overpayment of $334,000.